5 takeaways from the Biden, McCarthy meeting on debt limit

President Biden and the top four congressional leaders, including Speaker Kevin McCarthy (R-Calif.), came away from their Tuesday meeting with no path forward to avoid the nation defaulting on its debts.

The president’s meeting with McCarthy, House Minority Leader Hakeem Jeffries (D-N.Y.), Senate Majority Leader Chuck Schumer (D-N.Y.) and Senate Minority Leader Mitch McConnell (R-Ky.) came just over a week after Treasury Department Secretary Janet Yellen told lawmakers the U.S. could default by June 1.

The leaders spoke for roughly an hour, and while McCarthy came out after and said there was no movement made on the issue in the Oval Office, the president struck a more optimistic tone.

Here are five takeaways from the Tuesday meeting.

Biden considering 14th Amendment

Biden confirmed in remarks delivered from the Roosevelt Room after the meeting that he has been “considering” invoking the 14th amendment as a way to unilaterally work around the debt ceiling.

But the president acknowledged that it would not be a viable short-term solution, noting it would have to work its way through the courts to find out whether it is feasible.

“And in the meantime, without an extension, it would still end up in the same place,” the president added.

The idea hinges on a clause in the 14th Amendment that says the public debt “shall not be questioned.”

Yellen said Sunday using the 14th Amendment could spark a “constitutional crisis,” and others have warned it might rattle financial markets.

McCarthy, meanwhile, opposed the idea of the president using the 14th Amendment.

Biden open to using unspent COVID-19 funds

Biden also highlighted the option of rescinding unspent COVID-19 relief funds as an area where he and lawmakers can agree to make some spending cuts.

“I’d take a hard look at it, because … we don’t need it all. But the questions is, what obligations were made, commitments made, the money not disbursed, etc.,” Biden told reporters when asked if he would consider clawing back funds, even independent of debt limit discussions.

House Republicans have passed legislation that would raise the debt ceiling and cap government funding at fiscal 2022 levels — all aimed at curbing spending — and includes provisions such as clawing back the unspent COVID money.

The president has taken issue with other GOP efforts to roll back spending his administration has already approved through the Inflation Reduction Act, which caps health care costs and includes funding to combat climate change.

McCarthy says no new movement

McCarthy emerged from the White House signaling the sides each dug in on their existing positions.

“Everybody in this meeting reiterated the positions they were at. I didn’t see any new movement,” McCarthy said.

Biden, meanwhile, described the talks as “productive.” Similarly, Jeffries said everyone agreed that “we should move forward with real conversations.”

Biden and White House officials have insisted that Congress raise the debt ceiling without conditions, pointing to decades of precedent under Democratic and Republican administrations. GOP officials have been adamant that spending cuts should be part of any discussion about raising the debt limit.

The lack of tangible progress elicited frustration from others on Capitol Hill.

“To have five of the political leaders for our country walk out of the meeting and not one of them say that we made progress?” Sen. Joe Manchin (D-W.Va.) said. “Ridiculous.”

Leaders meeting Friday

Biden and McCarthy said they had directed staff members to huddle over the next 48 hours to find a way forward, and the president and congressional leaders would reconvene for another meeting Friday.

“One of the ways in which senators or congresspersons are able to back off some of the things they’ve done is if they give their staff some leeway,” Biden said.

Jeffries described the upcoming Friday meeting as a reason to be optimistic. He told reporters they had “an honest, frank discussion about a path forward,” and that their teams will get together in the days ahead to continue talks.

Biden and McCarthy had not met to discuss the debt limit since Feb. 1. The Speaker bashed the president after the Tuesday meeting about the fact that he hasn’t invited him for talks sooner, while the president argued that he extended the invite once the House passed their bill to avoid default.

Additionally, McCarthy said that a staff-level discussion had preceded the Tuesday meeting, which he had requested from Biden but did not publicize.

Lawmakers don’t want default

One development Biden cited as progress was an agreement reached at the meeting to take the possibility of allowing a default to occur off the table, with the leaders understanding the risks of blowing the June 1 deadline.

“Yes, there was substantial movement in the sense that everyone agreed that … defaulting on the debt is off the table,” the president said.

But he also alluded to that agreement being among three of the leaders, a contingency that did not include McCarthy.

McConnell’s major takeaway after the meeting was that the U.S. “is not going to default,” but he said a solution must ultimately be agreed upon by Biden and McCarthy. Additionally, Schumer later told reporters that the Democrats in the room asked the Speaker “to take default off the table.”

Still, the day concluded with each side largely blaming the other for the continued stalled talks.

Mychael Schnell and Emily Brooks contributed.

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